Marketing Management Report: IKEA's Strategic Analysis and Plan

This report provides a comprehensive analysis of IKEA's marketing strategies, focusing on its global operations and potential for growth, particularly within the Indian market. It begins with a strategic analysis using Ansoff's growth matrix to identify opportunities in market penetration, development, product development, and diversification. The report then delves into situation analysis, evaluating IKEA's internal and external business environments, including its strengths and weaknesses, and the competitive landscape using Porter's Five Forces model. A detailed market analysis explores political, social, economic, technological, and legal factors impacting IKEA's operations. The core of the report presents a marketing plan tailored for the Indian market, covering segmentation, targeting, and positioning (STP), and the marketing mix (product, place, price, promotion), with specific recommendations for the Indian context. The report concludes by emphasizing the effectiveness of IKEA's marketing measures and its potential for growth, especially in the Indian market.

MARKETING
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Strategic analysis....................................................................................................................1
Situation analysis....................................................................................................................3
Competitive analysis..............................................................................................................4
Market analysis.......................................................................................................................5
Marketing plan........................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Global growth aspects have helped companies in creating a wide impact on the sales and
growth measures. Fierce market competition and changing pace of the economy has forced
businesses to adopt different business measures. Analysing and evaluating consumer behaviour
help companies in understanding market demand and development measures in the economy.
Marketing contributes significantly in understanding consumer requirements and developing
products and services as per their needs and demands. According to American Marketing
Association, (2013) marketing is a process of creating, communicating and exchanging products
and services that has value for consumers or clients of the company. Presently unique marketing
measures have helped business to gain wide growth prospects within this highly competitive
economy. The present study will analyse the marketing strategies that has helped business in
developing prospects of sales and will also develop effective plan for expanding high growth and
development measures for the business.
Strategic analysis
Ikea is a globally established brand providing wide range of ready to assemble furniture’s
within the market. The organization is successfully operating across the globe serving distinct
needs and requirements of its consumers (Jobber and Ellis-Chadwick, 2012). Unique product
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Illustration 1: Global Business Locations
(Source: Sheth, and Sisodia, 2006)

range and effective marketing has helped the company in developing a well-defined success
mantra for the unit. Consumer’s carries key value for the organization and assessing their needs
and requirements is the basic growth and development opportunity for the organization. Ikea has
established an effective brand image within the market. Market position of the company is
renowned globally (Young and et.al., 2004). Business operations are effective and well planned.
The above figure represents global business location of the business along with future growth
prospects. Application of Ansoff's growth matrix will help in analysing growth opportunities for
the business.
 Market penetration: This strategy focuses on promoting current product in the existing
market. Ikea has established an effective brand image in Europe however, aggressive
promotion and strategic collaboration will help the company in maximizing sales.
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Illustration 2: Ansoff's growth matrix
(Source: Singh, 2007)

 Market development: The company has developed its international operations, however
there are many emerging markets where the business could be expanded and grown. India
is an effective example for the same. The country has wide growth prospect and effective
sales measures (Singh, 2007). Product development: This strategy is effectively favourable for the company. Ikea is
well known for customised and innovative product range. The company adheres
consumer demands wisely and plans its product range accordingly.
 Diversification: This segment of business growth is risky and costly. Ikea presently is
focusing on growing its furniture business rather than diversification (Indridason and
Wang, 2008).
Situation analysis
Business units are currently exposed to wide challenges and environmental issues. Ikea
has established a successful business brand within the economy. Its unique range of products and
high options for customization has helped business in establishing effective market demand. The
situational analysis of the company is effectively done by applying models for internal and
external business analysis (Linus, 2001).
The internal business environment of Ikea is effective and strong. The company has
managed a team of skilled and trained employees who helps in attaining business objectives
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Illustration 3: Internal analysis
(Source: Levens, 2013)

effectively. It uses quality raw- materials through well integrated system of procurement. The
technology adopted by the company is advanced and effective which helps in innovative and
quality products in limited time (Nandakumar, Ghobadian and O'Regan, 2011). The financial
status of the business reflects successful market position. The revenues of the company have
crossed a figure of €29.293 which represents a competitive position of the business. The overall
business process of the organization is well structured and managed and innovative.
Procurement, production and distribution methods have helped business in attaining a
competitive edge. Well managed and effective internal business environment has helped the
company in creating high success measures within the economy (Yannopoulos, 2011).
Competitive analysis
The above analysis represented that Indian market has high prospects for growth and
development. The competitive position of Ikea in Indian market can be effectively analysed by
using porter five-force model.
Illustration 4: Porter five force analysis
(Source: Levens, 2013)
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PORTER FIVE FORCE ANALYSIS
FORCE IMPACT ANALYSIS
Bargaining power of
suppliers
Moderate The raw material demanded by Ikea should be
of effective quality. The suppliers are wide but
the supply of wood in some countries is
regulated by government hence, suppliers have
moderate power.
Bargaining power of
buyer
High The organization delivers ready to assemble
furniture. Increasing online selling,
organizations have increased power of buyers
thus, they may shift to substitute if prices one
product rises or the company compromises
quality.
Threats of new entrants Low The brand image and area of operation of the
company is wide and renowned. Thus,
company has successfully raised the level of
competition which will be difficult to be
matched by new entrants (Jordan, 2015)
Threat of substitutes Moderate Ikea has limited perfect substitutes in the
market however, the similar product range is
still available for consumers to shift.
Competitive rivalry High There is wide range of competition within the
market that possess high level of market
competition for Ikea (Wang, 2007)
Market analysis
The market analysis of Ikea can be effectively done by closely analysing its external
business environment. Various elements of external business environment are not in the control
of the company however, it has a direct impact on organizational operations.
POLITICAL SOCIAL ENVIRONMENTAL
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Furniture industry has
considerable impact of
government regulations.
Policies for forest
conservation, environmental
safety etc. creates direct
impact on the cost of raw
materials or sales (Fitter,
2001)
Ikea has developed an
effective market structure to
deal with such issues and
abides the policy to enhance
business opportunities.
Changing trends and demands
create high impact on sales and
growth of the business.
Ikea closely examines
consumer demand and produce
goods accordingly.
Environmental concern has a
direct impact on business
growth and development
opportunities for furniture
segment.
Ikea has adopted unique and
innovative environmental
strategies such as green supply
chain, low wastage of wood
etc. this has helped the
business in developing
effective brand image.
ECONOMIC TECHNOLOGICAL LEGAL
These factors include rate of
inflation, growth rate, per
capita income, employment
rate etc.
Ikea considers these factors
for determining its sales and
marketing strategies for
enhancing market shares and
sales.
Technology is core need for
business operations. Ikea
focuses on adopting new and
latest technologies for
production as well as for
marketing. (viral marketing
strategy has helped the business
of Ikea to grow highly)
Companies need to abide
regulatory and legal
frameworks in order to
increase business growth
prospects (Neilson and
Pritchard, 2007)
The above analysis clearly represents that Ikea has developed a system to closely
examine the external factors and adopting effective policies for implementing necessary changes.
Thus, the changing factors create low risk for business growth (Neilson and Pritchard, 2007).
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Marketing plan
The study represents that the business operations of Ikea has been internally developed and
grown. Indian market has high prospects for growth and development. The marketing plan of the
company for the same is as follows:
(Source: Villanueva, Yoo and Hanssens, 2008)
Segmentation, targeting and positioning Segmentation: It is the process of dividing the vast market into small market segments
with consumers having similar tastes and preferences. Indian market is vast and has high
prospects for growth and development. Ikea will segment the market on the basis of
geographic (State wise segmentation to analyse diverse needs and behaviour),
Demographic (Age, gender and occupation), Behavioural (on the basis of lifestyles,
social class, income), Psycho-graphic (Buyer behaviour, discount schemes, usage, needs,
tastes). This will help the company in effectively analysing and understanding diverse
consumer demands (Ikea Feels At Home With Cross-Media Strategy, 2016). Targeting: Ikea will adopt differentiated marketing strategies to manage and maintain the
vast market demand. The company will focus on large market segment and thus, will
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Illustration 5: Marketing plan

develop marketing and promotional measures accordingly. Undifferentiated marketing
will be used to enhance awareness of the product within the market hence, converting
non users into users (Segmentation, Targeting and Positioning, 2010). Positioning: The product positioning will help in developing effective brand image in the
minds of the consumer (Villanueva, Yoo and Hanssens, 2008). To position the product in
an effective manner the company will adopt product differentiation where unique and
customised products will be produced to create high satisfaction. Service differentiation
will be used to provide high value for the product with higher benefits and image
differentiation through attractive colour schemes and advertisement will help in
developing brand awareness in the economy.
Marketing-mix for Ikea in India
The marketing mix of the company will help in defining and developing effective brand
image and well structured marketing measures for the product. Marketing mix by Ikea for Indian
market will be: Product: Ikea must focus on producing wide variety of products for Indian consumers
analysing the diverse needs and demands of the country. Moreover, changing market
trends has increased the demand of quality furniture’s in the market. Changing cultural
factors are increasing nuclear trends in the economy thus, customised home service with
quick delivery, are highly in demand (How IKEA Became Kings of Content Marketing,
2014). Place: The company must establish its physical as well as digital presence in the Indian
market. Intensive and selective distribution strategies will be helpful through
collaboration, Digital companies like eBay, Amazon etc. and physical stores as well.
Availability of products must be focused upon to generate market demand and sales. Price: The company must adopt penetration pricing policy to attract young consumers,
Psychological pricing for developing behavioural perception for product and skim pricing
to target high income and to up-street class of people. These strategies will help in
enhancing market sales (The principles of marketing, 2013). However, competitive pricing
is also significant for the company to develop its competitive market position.
 Promotion: This is one of the most important and significant part of marketing plan. To
establish business prospects in Indian market the company must use effective and well
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developed promotional measures. This will demand the company to design and develop
aggressive marketing measures. The promotional measures that the company must adopts
are sales promotion (Discount, vouchers, collective selling), advertisement (Digital and
print media), Online promotion (Add-words, SEM, Websites, banners, viral marketing,
you tube) and personal selling as well. This will help the company in meeting its
corporate objectives of enhancing brand awareness, sales maximization and generating
high demand (Welcome to IKEA, 2016).
CONCLUSION
The above study helped in developing an effective and clear understanding about the
marketing measures and strategies that the business units adopts in order to enhance their sales
and market share within the economy. The marketing analysis of Ikea helped in effectively
understanding the present market position and effective growth measures that the company may
adopt for sales enactment. The strategic marketing planning is developed on the basis of current
market analysis Ikea. Market development strategy of the company is highly effective for the
present business growth. The marketing plan for the same will helps Ikea in enhancing its
profitability within the economy. Developing Indian market has high and effective growth
potential. The impact of the same will be positive and well developed for the country.
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REFERENCES
Books and Journals
Fitter, R., 2001. Who Gains from Product Rents as the Coffee Market Becomes More
Differentiated? A Value‐chain Analysis. IDS Bulletin. 32(3). pp.69-82.
Indridason, T. and Wang, L. C., 2008. Commitment or contract: what drives performance in
public private partnerships?. Business Strategy Series. 9(2). pp.78–90.
Jobber, D. and Ellis-Chadwick, F., 2012. Principles and practice of marketing (No. 7th).
McGraw-Hill Higher Education.
Jordan, J., 2015. Foundations of Strategy. John Wiley & Sons.
Linus, O., 2001. Marketing and Advertising. IP research and communities. 5 (1).
Nandakumar, K. M., Ghobadian, A. and O'Regan, N., 2011. Generic strategies and performance
–evidence from manufacturing firms. International Journal of Productivity and
Performance Management. 60(3). pp.222–251.
Neilson, J. and Pritchard, B., 2007. Green coffee? The contradictions of global sustainability
initiatives from an Indian perspective. Development Policy Review, 25(3). pp.311-331.
Sheth, J. N. and Sisodia, R., 2006. Does marketing need reform?: Fresh perspectives on the
future. ME Sharpe.
Singh, T., 2007. Marketing Strategies of Multinational Corporations. American journal of
business. 22.
Uncles, M., 2002. From marketing knowledge to marketing principles. marketing theory. 2(4).
pp. 345-353.
Villanueva, J., Yoo, S. and Hanssens, D. M., 2008. The impact of marketing-induced versus
word-of-mouth customer acquisition on customer equity growth.Journal of marketing
Research. 45(1). pp. 48-59.
Wang, C. L., 2007. Guanxi vs. relationship marketing: Exploring underlying differences.
Industrial Marketing Management. 36(1). pp. 81-86.
Yannopoulos, P. D., 2011. Impact of marketing strategy formulation. International Journal of
Business and Social Science. 2 (18).
Young, L. and et.al., 2004. Using social marketing principles to guide the development of a
nutrition education initiative for preschool-aged children. Journal of Nutrition Education
and Behavior. 36(5). pp. 250-257.
Online
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American Marketing Association. 2013. ‘About AMA: Definition of marketing’. [Online]. Available
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